The foreclosed home list in the Arizona metropolitan area of Phoenix grew to 5,316 properties in July from 5,149 the previous month. According to market data, the bulk of lenders’ foreclosure activity occurred during the last week of July, with daily foreclosures increasing at an average of 60.
Industry analysts said that the increase in the number of foreclosure properties in Phoenix last month may be due to changes or expirations of foreclosure moratoriums. Adding to these factors is the growing unemployment rate which is blamed by analysts across the country as the cause of many foreclosures in the past months.
Meanwhile, industry analysts also pointed out that the slow progress of the Obama Administration’s loan modification program is another factor that drove up foreclosure rates. The U.S. Treasury Department released a report showing loan modification efforts of participating mortgage servicers.
The report noted that 85 percent of the total mortgages in the country were on the portfolios of lenders participating in the initiative while over 400,000 trial modifications offered to troubled borrowers were extended.
The Obama Administration has been urging lending institutions to boost their loan modification efforts to double the current numbers by November 1. Lenders that received higher marks for their loan modification programs are Saxon Mortgage, Aurora Loan and JP Morgan Chase.
At the Home Preservation Workshop, Arizona Attorney General Terry Goddard said that he received complaints from homeowners who experienced difficulties in contacting their lenders.
On the other hand, pre-foreclosures in July rose to 9,169 from the prior month’s 8,700 figures. But industry experts noted that pre-foreclosure figures dropped during the latter part of July, which they assumed meant that more lenders were working with troubled homeowners.
The daily average rate of pre-foreclosures was 328, compared with nearly 532 in the first week of July.
According to industry experts, this could mean that lenders are holding off foreclosures until the first week of October. This is the time when Arizona legislation allows lending institutions to pursue assets of delinquent borrowers to recover losses from foreclosures. There has been a proposal to repeal the legislation but some real estate lawyers have started to receive inquiries from out-of-state lending institutions about how the new state law could assist them in recovering losses due to default loans.
Arizona earned the second spot in the ranking of states with the most number of foreclosure filings in July.
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